Consignment stock

Interdisciplinary case

The consignment stock is a logistics concept which from the point of view of the procuring party (consignee) is designed to enable the withdrawing of production-related materials from stock at short notice whereby the effect on the inventory is only booked after the materials have actually been used in the production. A fundamental point of this form of processing is that transfer of ownership of the goods is first made when the goods are removed from the consignment stock.

In particular with consignment stocks where the supplier and consignee are located in different customs areas, the consignment stock, however, presents certain challenges in terms of the customs regulations and VAT law for the supplier and for the consignee. For example, does it make sense to do the processing via a bonded warehouse? Which parties are subject to which obligations? Can possible theoretical arrangements even be realised in practical terms?

There is also often a discussion about the correct delivery conditions for such arrangements, especially against a background of contract negotiations with suppliers. The terms of delivery assign rights and obligations to the parties in accordance with civil law. As such, the terms of delivery usually define the obligations regarding customs clearance and also the liability with regard to the delivery of goods and impacts on the goods during delivery and storage, etc.

During the discussion and negotiation of contractual arrangements it is also important that provisions from other legal areas are not overlooked. This includes the conditions for VAT deductibility and also the obligations to transfer foreign trade data or also the observation of product liability law.

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Andreas Wahl

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